Unemployment rate (x) Inflation (y)

5.5 4.4

5.3 4.6

5.6 6.1

6.8 3.1

7.5 2.9

6.9 2.7

6.1 2.7

5.6 2.5

5.4 3.3

4.9 1.7

4.5 1.6

4.2 2.7

4.0 3.4

4.7 1.6

5.8 2.4

6.0 1.9

5.5 3.3

5.1 3.4

4.6 2.5

4.6 4.1

5.8 0.1

9.3 2.7

9.6 1.5

8.9 3.0

8.1 1.7

7.4 1.5

6.2 0.8

5.3 0.7

4.9 2.1

4.4 2.1

1. Explain your dependent and independent variables completely.
2. Calculate the correlation coefficient for X and Y and construct a scatter-plot with the fit line. Interpret the results. Is the correlation coefficient significantly different from 0 (conduct the two-tail test on the population correlation coefficient, choose a confidence level on your own)